Real Estate and the Spreadsheet Monster.
Do you know what I think is the most annoying thing about spreadsheets?
They are too easy to use, and to a non-database user they look very similar to database tables. The individual user is given a false impression that the data is kept in a safe way, and is not alerted to stop using spreadsheets as a database solution. Single spreadsheets here and there are added up to several spreadsheets. Over time this could lead to serious problems within your Real Estate company. The employees have created a monster, without even knowing it.
To avoid any misunderstandings, I would like to point out that I do love spreadsheets. They are brilliant, quick, and easy to create. You could easily make complex calculations and visualize the data in professional-looking diagrams for internal and external audiences. In the right context, spreadsheets make a great working tool, but my recommendation is to use the spreadsheets as they are intended to, and that is not to use them as a database solution. When you do, you are creating a spreadsheet monster.
What is the problem?
Most Real Estate companies know that the data regarding buildings and tenants must live in an ERP system. But, I have seen examples where the data is pushed from the original data sources and into spreadsheets that are updated every month. Some data may be combined, which leads to new datasets and then it starts to live its own life. The problem starts when spreadsheets are being used as the source for information. And the real problem is when you manually update the data and aggregate data in your spreadsheets, without proper rules for updating (when, how and by whom the data should be updated). That is when the spreadsheet monster is born.
The worst-case scenario is when data is lost and you cannot re-produce the information. It is already a problem when the data you are basing your business decision upon is not consistent between different time periods, different users, or different spreadsheets. If you have a lot of data records, the volume itself could be an issue as well and it can be hard to manage updates. For example, if you have created a manual updating routine, you will have to face the risk of somebody forgetting to do the updating. The result is inconsistency in your datasets. So, the spreadsheet monster lives on.
Some basic rules might be known in your organization. Your employees might have the knowledge that there are certain regulations based upon GDPR to protect your tenants’ personal information, but if you are unlucky, you might have information in spreadsheets that are not deleted according to your internal privacy rules. The monster grows.
The intention is perhaps not to collect and store valuable data in different spreadsheets. It may start with a small sample of data that is used for its purposes and filed away. And the next time the same data is collected, you want to see the trend. You combine your old spreadsheet with the new one. It is easily managed. Without realising, you are creating a database that is hard to manage in a good way. The monster grows bigger.
A common issue in Real Estate businesses is that data is handled isolated by a specific user, without the possibility to backtrack what has been done, by whom, or at what point in time. At the time it might seem as a quick and easy solution to store the data in different spreadsheets and link the information together in a report. The challenge arises if you truly want to explore data over time and feel confident of the data you are using. To be able to do that, you must make sure that the data is structured, and flows, in a proper way.
It is easy to take the first steps manually. Of course, nobody had the intention of creating and feeding a spreadsheet monster on purpose. The issue for many Real Estate companies is that nobody raises the question of how it could be handled in a different way when the ad-hoc process becomes a permanent database solution. And if everything is working fine, you do not get the feeling of urgency to develop a more secure data flow process.
If you keep on feeding data into spreadsheets, you will create an even bigger monster. A monster that will be time-consuming, as well as increasing the risk of exposing your Real Estate company for errors and inconsistent data. Not to mention the limitations of not being able to use the data in automated processes. You will need real-time, automated, and secured data to be able to use it for ML (Machine Learning) and AI (Artificial Intelligence). This is not possible when you have an untamed monster.
Most spreadsheets are handled manually and that brings it to a limit. Even if you can set up automated updates, you will not have the data flow in a secure way if you are using spreadsheets as your database solution. Now you will have to decide – is it time to feed, or kill, the monster?
What is the solution?
I think the only answer is that you will have to kill the spreadsheet monster and I suggest you do that with a clear strategy.
As a first step, you should communicate and make sure that the strategy is known within the whole company. All employees should be aware that the source of data should be information in the structured database, not in spreadsheets.
The second step is investing in the right technology; to secure all data in a proper database solution. If you want to be able to truly be data-driven and be able to link real-time data to build automatic processes, you will need a data warehouse that holds your data. You should make sure to set some rules and automated settings for how data flows. Then, by all means, use the spreadsheets to handle the data. If you want, you could collect data manually in spreadsheets, from different sources. But the data should then be brought together in a central database to be a real asset for the Real Estate company. Do not make new monsters, keep them away from your everyday business.
In addition to the strategy and the technical solution, you will need to secure that the right competence is available. Most people can handle a spreadsheet, but when it comes to database processes, you will need to have skilled and trained employees that will make sure that the data is stored in a structured and secured way.
To sum it up you could say that using spreadsheets is always an easy way to solve an urgent matter when it comes to analysis and presentation, but it is not the long-term solution for database storage. Setting up a database and a data warehouse properly takes time, but you will save time in the long run, because I bet that currently a lot of time is spent on spreadsheet administration within your Real Estate company.
Do you want to know how future-proof your current system is? We have made a quiz that can tell you exactly that. You can find it here. It also provides materials to help you further in your journey. If you want some help with catching and taming the monster (and saving some valuable time in the long run), don’t be shy – ask somebody that has experience in the area. You know where to find us
Pernilla Klein is a Business Consultant working at Stratiteq and specialized within Real Estate, where she is facilitating workshops in order to fulfill the needs of the client’s data-driven solutions. She is passionate about combining strategy with a technical solution and the insights you get if you combine your customer feedback with internal/external data. Extracurricular; she is often seen attending live concerts with some obscure post-punk band (that no one has heard of).